Digital Asset Inflows Make Huge Turnaround: $128 Million Pours into Crypto Market
MIM #8: Plus new paths to global adoption, AI in crypto, and flight tickets becoming NFTs
Hey Speedsters, another great week has come and gone in crypto, only reinforcing that this is by far the most exciting and potentially profitable market in the world today. According to CoinShares, digital asset investment products experienced a marked turnaround last week, receiving inflows of $160m after six consecutive weeks of outflows.
(Source: blog.CoinShare.com)
The main beneficiary of this increase was big bad Bitcoin, which returned to prominence with inflows of US$128m. This is likely a response to growing concerns over the stability of traditional finance. The United States, Germany, and Canada were the most notable sources of these inflows, with US$69m, US$58m, and US$26m.
Bitcoin is a shelter from the flood and Magic is the Noah leading you to the Ark. Ethereum, on the other hand, suffered outflows of US$5.2m for the third consecutive week, with investor jitters surrounding the upcoming Shanghai Upgrade being the likely cause. Altcoins Solana, Polygon, and XRP experienced inflows of US$4.8m, US$1.9m, and US$1.2m, respectively.
Like many of the MIM newsletters, this one has an international flavor to it. The diversity of stories from across the globe shows that cryptocurrency is bigger than any one country or governing body. That is the way it was designed, and that is the way it works in practice. With that being said, here is all last week’s news.
Last week’s crypto news
- According to a recent report by Citi, the mass adoption of crypto will be driven by CBDCs and tokenization. The report suggests that the rise of CBDCs, digital currencies pegged to fiat currencies and controlled by central banks, will be the primary driver of the next influx of crypto adoption. Citi analysts predict that $5 trillion will be circulating in the economy in CBDCs by the end of the decade.
(Source: USFunds.com)
The rise of tokenization, or bringing traditional financial assets onto the blockchain, is also expected to be a key driver of mass crypto adoption. Tokenization could grow up to almost $4 trillion in value by 2030.
Magic would certainly add Web3 gaming to this list as well. With over 3 billion gamers worldwide and the ability to own your digital assets, gaming will be a huge contributing factor to mainstream adoption as the value it provides to gamers is unquestionable.
2. According to a report from Fortune Business Insights, the blockchain AI market will reach $973.6 million in 2027. The crypto industry is seeing numerous AI projects emerging with great novel features, adding immense value to the industry.
- Blocktrace — A service provider using AI to simplify blockchain analysis and forensics.
- SingularityNET — A decentralized AI marketplace that allows developers to share and monetize algorithms and create AI-powered DApps for industries such as finance, healthcare, and transportation.
- UpOnly — A Web3 investment platform leveraging AI analytics to boost user profits and investor insights. AI can help construct portfolios, identify new investment opportunities, boost returns, and manage risk.
3. Coinbase has hired Lucas Matheson, a former executive at Shopify, as its country director for Canada. The move comes as the company confirmed its plans to expand in Canada despite the country’s new regulatory framework for cryptocurrency exchanges.
Coinbase signed an enhanced Pre-Registration Undertaking with Canadian regulators to comply with the new rules.
Matheson will oversee more than 200 engineers at Coinbase and the company’s global leadership team will be making frequent trips to Canada to engage with regulators. Hat’s off to Coinbase and Kraken for weathering the storm and continuing to do business in Canada! Resolve is what crypto companies need despite heavy-handed regulation, and industry-leading exchanges are demonstrating it in spades.
4. EigenLabs, a staking protocol developer, has raised $50 million in a Series A funding round led by Blockchain Capital. EigenLabs aims to launch a protocol that allows Ethereum stakes to reuse tokens to help secure other protocols, in phases throughout the year. The funding comes during a crypto winter, with investors focusing on smaller, early-stage rounds. This is undoubtedly a sign of improving conditions and bigger investments.
5. Argentinian budget airline Flybondi has partnered with NFT ticketing company TravelX to issue all tickets as NFTs on the Algorand blockchain. The new integration, called Ticket 3.0, offers passengers a more flexible travel experience and allows them to change their name, transfer, or sell their NFT tickets independently.
Passengers can purchase travel tickets using fiat currency, and TravelX issues a synchronized NFT ticket on top of the regular e-ticket. Travelers can manage and store their NFTs through Flybondi. The airline can reduce customer service costs and increase revenue from trading fees.
6. Bitcoin rewards app Fold and Visa have announced an expansion of their partnership to include North America, Europe, Latin America, and the Caribbean. Visa will now be the exclusive network partner for Fold’s prepaid debit products in these regions. The partnership offers users bitcoin rewards instead of traditional reward points on their Visa debit cards.
With demand for Bitcoin onramps increasing outside the US, the companies plan to empower local financial service providers to launch their Bitcoin rewards using Fold’s infrastructure. Despite the recent crypto banking crisis, it appears Visa remains committed to investing in the crypto sector.
Magic’s parting thoughts
Bitcoin’s recent outperformance of traditional safe-haven assets such as gold and 10-year treasuries is attributed to regulatory challenges, uncertainty in the banking sector, and the forced exit of bad actors, according to Mark Connors, 3IQ’s head of research.
Connors believes that recent bank failures put traditional finance markets at risk, therefore making Bitcoin and other crypto assets more appealing. He also sees Bitcoin rallying due to the enforced departures of some of the industry’s biggest players. This has helped clean up the industry, leaving credible industry leaders to build crypto.
Connors expects Bitcoin to continue diverging from other digital assets such as Ether and to rally, despite the U.S. government’s attempts to control the digital asset industry. Bitcoin is bigger than any single country.
Any regulation attempted by centralized entities is just a minor dent in Bitcoin’s impenetrable, decentralized armor. Bitcoin is untouchable, as there is nobody behind the scenes to profit from it. Perhaps that is why traditional finance is so afraid of it.
